Fischer Calls for Debt Ceiling Agreement

Dabbling in the national debate, Louisville Mayor Greg Fischer is calling on President Barack Obama and congressional leaders to compromise on the country’s debt ceiling before the August 2 deadline.

The mayor warned against a possible default, saying it would have a negative impact on Metro Government and “every aspect of American life.” Earlier this week, the president and Speaker John Boehner outlined their positions and plans, but the Washington stalemate continues.

“It’s important that both parties—Democrats and Republicans—put aside partisan differences and seal a deal that addresses the debt ceiling and balances a need for deficit reduction and job creation,” Fischer said in a news release. “Default would be a disaster for our country and have a trickle-down impact on our city.”

· Interest rates will rise, increasing the costs of borrowing to the city and its residents and businesses;

· Credit ratings could suffer since a significant portion of the city budget is based on anticipated federal funding, increasing the cost to borrow; potentially affecting major projects such as the Ohio River bridges project.

· City federal funding, which involves draw downs from the Treasury, could end;

· Citizens who depend on the regular flow of federal funding (seniors, those in poverty and persons with disabilities) will suffer;

· Bondholders in the city, ready to redeem their federal bonds, will not be able to do so;

· City projects with mixed federal and non-federal funding could be stalled based on the federal side not being available;

· Federal workers in the city could be furloughed or suffer layoffs;

· Federal facilities in the city could suffer curtailed spending, thereby harming the local economy;

· Foreign investment in U.S. cities such as Louisville could suffer based on lack of confidence in our economy;

· The University of Louisville and its students, who have numerous arrangements with the federal government, would suffer the freezing or loss of such funding.

No formal message was sent to the White House or Speaker Boehner’s office, but a spokesman for U.S Rep. John Yarmuth, D-Ky., confirmed that Fischer and the congressman talked at length about the debt ceiling last week.

It wouldn’t be Fischer’s first swing at national politics either. In 2008, he made an unsuccessful bid against businessman Bruce Lunsford for the Democratic nomination to run against Senate Minority Leader Mitch McConnell, R-Ky., who is a key player in the ongoing negotiations.